WASHINGTON (Reuters) - The White House on Wednesday formally notified Congress of its plans to begin free trade talks with the 27-nation European Union, an effort to leverage the world's largest trade and investment relationship to create new economic growth.
"A high-standard comprehensive trade agreement with Europe is something that will be enormously beneficial for the U.S. economy and the EU in terms of creating new export opportunities (and) boosting jobs," Acting U.S. Trade Representative Demetrios Marantis told reporters at the U.S. Foreign Press Center.
President Barack Obama announced plans to negotiate the pact in his speech to Congress in February. But U.S. practice is for the administration to send lawmakers a formal notification at least 90 days before beginning talks.
Lawmakers and business groups welcomed the news, but said it heightened the need for the administration and Congress to work to together to pass "trade promotion authority."
That legislation would allow the White House to submit the U.S.-EU trade deal - once it is completed in one or two years - to Congress for an up-or-down vote without any amendment.
However, the trade promotion authority bill also gives Congress a chance to craft negotiating objectives for the U.S.-EU talks and another set of U.S. free trade talks with 10 countries in the Asia-Pacific region slated for conclusion this year.
"To fully realize the potential benefits of a transatlantic agreement, we will have to tackle many difficult behind-the-border measures," House of Representatives Ways and Means Committee Chairman Dave Camp, a Michigan Republican, said.
Because tariffs across the Atlantic are relatively low, the hard work of the negotiations will be smoothing out regulatory differences that have stunted trade in areas such as agriculture, chemicals, pharmaceutical and autos.
NOT 'A MAGIC POTION'
Two-way goods and services trade between the United States and the EU totals about $1 trillion annually. The two sides also have combined foreign direct investment in each other's market of about $3.7 trillion.
But bilateral trade between the two large, mature economies has grown slowly in recent years because of the effects of 2008-2009 financial crisis and competing subsidy and regulatory policies, the Peterson Institute for International Economics noted in a recent policy brief.
"A trade accord is not a magic potion for prosperity, but it can contribute to economic recovery by removing even relatively low barriers across a large volume of bilateral trade," the Washington-based think tank said.
The Center for Economic Policy Research in London has estimated a U.S.-EU free trade agreement could generate 119 billion euros ($155 billion) a year for the European Union and 95 billion euros a year for the United States.
At a Senate Finance Committee hearing on Tuesday, lawmakers repeatedly pressed Marantis on the need for a "comprehensive" pact that would tear down longstanding EU barriers to U.S. farm products and contain strong intellectual property rights protections for U.S. goods.
"Our past negotiations with the European Union have shown just how difficult this task can be. Let's hope that we can get it done this time," Senator Orrin Hatch of Utah, the top Republican on the Finance Committee, said.
Marantis acknowledged those difficulties in the letter notifying Congress of the talks, but said the potential gains from the pact "overwhelmingly justify the effort."
Exploratory discussions with the EU and key stakeholders "boost our confidence that it will be possible to find mutually acceptable solutions on difficult issues," he said.
The text of USTR's letter to Congress can be found on the agency's website: http://www.ustr.gov/sites/default/files/03202013%20TTIP%20Notification%20Letter.PDF
(Reporting by Doug Palmer; Editing by Sandra Maler and Stacey Joyce)